"Neither side of the Fed's mandate appears to be in perfect health. As Chair Powell outlined in his conference, on the labor side: "Overall, the marked slowing in both the supply of and demand for workers is unusual. In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen." Meanwhile inflation has "eased significantly from its highs in mid-2022 but remains somewhat elevated relative to our 2% longer-run goal.""
"The Fed cut rates by 0.25%, but Jerome Powell framed the move as "risk management" driven by labor market weakness, leaving investors uneasy. Markets were flat as the Fed's dot plot suggested a possible 50bps cut at a meeting later this year, though Powell stressed a meeting-by-meeting approach. Trump appointee Stephen Miran dissented in favor of a bigger cut, underscoring political pressure on the Fed and highlighting divisions that signal a cautious, uncertain path ahead."
The Federal Reserve reduced its policy rate by 25 basis points, with Chair Jerome Powell characterizing the action as risk management driven by labor-market weakness rather than clear confidence about inflation. Powell highlighted a marked slowing in both labor supply and demand and rising downside risks to employment, while inflation has eased from 2022 highs but remains above the 2% goal. The Fed's dot plot left open the possibility of a 50bp cut later this year, yet Powell emphasized a meeting-by-meeting approach. A dissent from Stephen Miran favoring a larger cut underscored political pressure and internal division. Markets reacted with unease, flatter equities, and higher Treasury yields.
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